BAGHDAD - A cable sent from the U.S. Embassy in
Baghdad before Iraq's parliamentary
elections shows that American diplomats warning against exactly the kind of
coalition that is trying to form the next Iraqi government after more than
eight months of bitter negotiations.

U.S. officials now say they're satisfied with and in
fact influenced the agreement that would put incumbent Prime Minister Nouri
al-Maliki at the helm of a unified Shiite Islamist-led government backed by
the Kurdish alliance and including at least some of the largely Sunni
Iraqiya party. But before the elections on March 7, an embassy cable warned
that such a government would be more closely aligned with Iran.

The cable is one in a hoard of State Department
documents released by the WikiLeaks Web site this week.
The release comes in the midst of a the sensitive process of forming a
government in Iraq - a task that most had hoped would come to an end next
month.

The cables underscored dissatisfaction from regional
Arab countries with Maliki's leadership and concern that Iran appears to
have the upper hand in Iraq.

But analysts said the cables are not surprising as the
U.S. military prepares to leave and Washington's concern about Iranian
influence grows. Their release is unlikely to hinder Maliki's ability to
cobble together a cabinet, the analysts and Iraqi officials said.

"Here the Iraqi government dismissed them and said
this is just Western propaganda against us before they even read it," said
Mahmoud Othman, an independent Kurdish legislator. "They say it was
prearranged at this moment to create problems and they will ignore it and it
won't have an effect. Of course, other people who use their minds read it,
and it shows quite a lot."

The cables paint a picture of U.S. officials and Arab
leaders anxious about Iranian meddling economically, politically and through
the provision of weapons and training to Shiite militias.

"Given the likelihood of a Shia-led victory in the
election, Iran appears more concerned about the strength of a united Shia
bloc in the post-election phase of government formation," a cable from the
U.S. embassy in Baghdad from November 2009 said.

It also stated that Iraq's Kurds would be "an
important element in ensuring a pro-Iranian Shia victory."

U.S. officials had hoped the election would fracture
Shiite unity and weaken religious rule and Iranian influence. The cable
called Maliki's break with his Shiite partners, who were considered closer
to Iran, to run with his own coalition in Iraq's parliamentary election a
blow to Iran's plan for a "subservient" and "economically dependent" Iraq.

But Maliki reunited with his former Shiite partners
after the election. His key Shiite backers outside his own bloc, the
Sadrists, gave him their support after intense Iranian pressure. That gave
Maliki an advantage over his primary rival, secular Shiite Ayad Allawi, as
well as competitors from within Shiite blocs.

The cable highlights what diplomats believed were the
close ties between the commander of the Quds Force of the Islamic
Revolutionary Guards and Iran's point man on Iraq, Brig. Gen. Qassim
Suleimani, and Iraq's top government officials since at least 2003; the
Iranian flow of money to Iraqi allies of between $100 million and $200
million a year; and "regular" consultations between Iraqi officials and
Iran's top leaders.

"Iran's tools of influence include financial support
to (and pressure on) a cross-spectrum of Iraqi parties and officials;
economic development assistance, notably to religious organizations; lethal
aid to select militant Shia proxies; and sanctuary to Iraqi figures fearful
of [U.S. government] targeting... this leverage also extends, to a lesser
extent to select Sunni actors," the cable said.

Cables from embassies in the region also suggested
that the Saudi king perceives the Iraqi government under Maliki as an
Iranian proxy. The United States has been trying to foster stronger
relations between Iraq and its Arab neighbors to counter Iranian influence.

In a meeting with John Brennan, the White House
counterterrorism adviser, last March, King Abdullah of Saudi Arabia called
Maliki an "Iranian agent," a cable said.

According to a cable, Qatar's Prime Minister Hamad Bin
Jassim al Thani told U.S. Sen. John Kerry (D-Mass.) in February that Iranian
President Mahmoud Ahmadinejad had told him, "We beat the Americans in Iraq;
the final battle will be in Iran."

It is unclear what effect the cables will have on the
relationship between Iraqi and U.S. officials as American troops leave Iraq.
Iraq's Ministry of Foreign Affairs began passing the "names of Iranians
applying for diplomatic visas to the U.S. Embassy for vetting" in 2008 and
denied visas to "suspected intelligence officers," according to a cable from
last year. The U.S. is now much more dependent on Iraqi counterparts for
information and dealing with what they see as "malign" Iranian influence.

"We check the names of all diplomats, especially from
our neighbors, through Iraqi intelligence. It's a standard procedure,"
Foreign Minister Hoshyar Zebari said Monday, denying any American
intervention. He had not fully reviewed the cables but called them
"damaging" and "the timing terrible."